Comprehensive Care Raises Cash to Pay Interest on Bonds
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NEWPORT BEACH — Comprehensive Care Corp. said Tuesday that some of its bondholders are demanding immediate interest payments on $9.54 million worth of corporate debt.
The bondholders filed a so-called notice of acceleration, which would require Comprehensive Care to pay both the principal and accrued interest on its 7.5% convertible bonds, which are set to mature in 2010.
Company President Chriss Street said that interest payments, due Oct. 31, have not been made. The company fell short of funds while it settled a tax dispute with the Internal Revenue Service, he said.
Comprehensive Care, a Newport Beach health services company that markets chemical-dependency programs to hospitals and clinics, raised enough money Monday to pay the $350,000 interest on the bonds. It did so by completing a private placement of 100,000 shares of the company’s stock with Ryback Management Corp.
Ryback, a mutual fund company based in St. Louis, manages the Lindner group of funds. It paid $6 a share for Comprehensive Care’s stock.
With cash in hand, Comprehensive Care said, it plans to pay all interest due on Feb. 28.
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